Release: Kalimantan Gold drilling well underway

(Vancouver, January 5, 2005) Kalimantan Gold Corporation Limited resumed drilling in the southern extension area of the Far East Zone at Baroi in the beginning of December 2004. Drilling began with hole BF42 in the center of the airborne magnetic high anomaly (assays pending) which is 500 meters south-west of holes BF39/40.

Drilling in hole BF42 first encountered granodiorite, followed by sediments (silt/sandstone), then it changed to porphyritic textured dacite that is mineralized with copper and strong pyrite for 33 meters - then more sediments and the last one meter before the hole was stopped at 299.50 meters finished in well mineralized breccia. This depth is the absolute limit of our company owned drill. This drilling confirms the existence of copper at depth well below the granodiorite.

All of these next planned holes target different potential porphyry intrusions and we are optimistic of success.

Hole BF42A is being drilled south of BF42 about 200 meters into the center of the magnetic high anomaly where several radiating major structures will be intersected. Our geologists have observed that the rock is much fractured on surface in the area of the drill hole.

An aeromagetic and structure map (the NR05-1 map) that shows the location of the holes drilled to date, and the proposed holes, at Baroi has been posted in the project, map section of our web site at www.kalimantan.com. The map is an in-house interpretation that uses the original regional data and shows the detail inside the area of low magnetic response where holes BF43, BF44 and BF45 are planned. This detail was not so obvious on Figure 11 of our Technical Report that used an external consultant's interpretation. These magnetic anomalies that display moderate magnetic highs located within a broad area of magnetic low are classic porphyry responses. They also correspond and confirm the ground magnetic data which previously was at question.

Drilling on hole BF42A began on December 26, 2004. Once this hole is completed the drill will be moved to drill, one or both depending on results, of BF43 or BF44 to test a silicified and leached ridge 650 meters north of BF39/40. Next will be BF45 to be drilled into a zone of near continuous high-grade surface samples (numbers 1837 to 1871) over a width of 190 meters that also corresponds to a high ground magnetic anomaly. The last planned hole in this drill series is identified as BF0?? is designed to test the intersection of major structures at the elevated response within the broad low magnetic anomaly.

Baroi mapping and sampling

Monzonite is a favorable host for mineralized porphyry deposits. Surface sampling of a mineralized monzonite area in the Baroi Central Zone, west of the Far East Zone (FEZ) is well underway. Before moving the focus of our exploration activity to the FEZ, to follow up high-grade surface samples there, we recovered a 9 meter channel sample that returned 0.45 % copper, 11 grams per tonne silver and 2.53% zinc from a 10 by 10 meter outcrop in the Central Zone. Now with more exploration information, we are going back and exposing more areas for channel sampling. This monzonite outcrop is also located near a well defined magnetic high. Preparations are being made to move the Company's scout drill rig to this location in the near future. Dependant on results of the present mapping and sampling program it is expected a series of scout holes will be drilled to test this conducive geological environment.

Kalimantan Gold's exploration efforts are directed first towards intercepting porphyry mineralization at depth and subsequently to continue drilling to define the size of the deposit. We at Kalimantan Gold remain confident that through our commitment to the drilling program, a source intrusion responsible for the extensive high-grade mineralization at Baroi will be identified.

Qualified Person

All data, as disclosed in this press release, including sampling, analytical and test data have been verified by the Company's Qualified Person, Didik Prasetyo, Senior Project Geologist.

Quality Assurance

The Company in addition to its normal laboratory work with PT Indoassay Laboratories from Balikpapan, has established quality assurance procedures for sampling and assaying. This includes duplicate and re-assay checks of samples with PT Intertek Utama Services, Jakarta an internationally recognized laboratory.

The Company

Kalimantan Gold Corporation Limited has a 75% interest in a 129,200 hectare Contract of Work located in Central Kalimantan, Indonesia. Baroi, a porphyry copper-gold prospect is one of 38 prospects identified within the CoW and is currently the main exploration focus of the Company. (end of release)